by Roelf Odendaal, Boston MFO, IOM Indaba
STEP (The Society of Trust and Estate Practitioners – the international professional body for trustees, wealth advisors and estate practitioners) recently published a report on Attitudes to Wealth.
Their findings are insightful and suggest that families are actively looking at ways to mitigate the risks future generations will face. It also provides families and their advisors with a basic understanding of trends and how they can provide better for the future and challenges future generations will face.
The survey was completed by 909 respondents from 86 countries of which the majority are professional legal, tax, trust, and wealth professionals. The majority of respondents have more than more than 20 years’ experience.
Some of the findings that are of interest for families with international wealth and service providers managing wealth are outlined below.
Securing the family’s wealth for future generations
- Families continue to secure their family’s wealth for future generations. The focus has changed from creating and growing wealth to intergenerational preservation of wealth.
- Families are concerned about the legacy that they will leave. They are conscious about social needs, injustice and making a positive impact on society.
- A new focus is placed on preparing future generations for the wealth they will inherit. Education focuses on financial literacy, governance, leadership, accountability and responsible stewardship.
The major concerns families have
- Protecting wealth from the current geopolitical turmoil.
- Changing legislation, global uncertainty and natural disasters as seen as major risks.
- African families are concerned about political and economic volatility and mitigate the risk by diversifying their wealth though international solutions like trusts, companies and foundations in international finance centres.
- European families maintain an altruistic dimension to their wealth focusing on their social responsibility and philanthropic endeavours.
Philanthropic giving
- Is limited to surplus wealth rather than a strategy the family engages with actively.
The focus of the next generation
- Creating and maintaining a family legacy.
- Wealth inequality.
- Pursue purpose rather than profit.
The use of trusts and other fiduciary structures
- Families are positive about the use of fiduciary structures and see them as a vehicle to manage wealth effectively.
- There are still misconceptions about trusts and what trusts can be used for. Education of future beneficiaries should be high on the agenda of all wealthy families.
In conclusion, it seems that the major themes families are focusing on are education and securing wealth over generations. In a world marked by geopolitical challenges, uncertainty, and changing understanding of the responsibility wealthy families have towards society, securing wealth internationally is high on the agenda and is seen as a necessity rather than a privilege or luxury.
Boston Multi Family Office is ideally positioned to assist clients with securing their wealth and planning for future generations. If you would like to discuss how we might be able to assist please contact Roelf Odendaal (Roelf.odendaal@bostonmfo.com) or any of your Boston contacts.
About the author
Roelf Odendaal was born in South Africa and moved to Mauritius in 2001 to establish the Turnstone Group, and moved to the Isle of Man in 2004 when he became the Managing Director. Roelf works with High and Ultra High Net Worth families to establish multi-generational and multi-jurisdictional family businesses and assists in establishing family governance systems.
As one of the founders of the Isle of Man Indaba, Roelf is deeply committed to expanding growth opportunities between the Isle of Man and South Africa. He holds a B.Com in Accounting and Business Accounting, a MBA from Birmingham University (UK) as well as a STEP Advanced Certificate in Family Business Advising. He is a member of the Institute of Directors as well as the Society of Trust and Estate Practitioners.
On weekends, Roelf can be found wondering through the Manx countryside and glens capturing that which makes the Isle of Man such a wonderful place to live in. He regularly visits South Africa and is keen supporter of all things concerning wildlife.